Category Archives: History

Federal Minimum Wage Lower Now Than 1963

As we observe the 50th anniversary of the March on Washington for Jobs and Freedom today, some quick numbers to chew on.

In front of 170 W 130 St., March on Washington...

In front of 170 W 130 St., March on Washington, l to r, Bayard Rustin, Deputy Director, and Cleveland Robinson, Chairman of Administrative Committee / World Telegram & Sun photo by O. Fernandez. (Photo credit: Wikipedia)

The federal minimum wage, on an inflation-adjusted basis was higher in 1963, than it is today. Richard Eskow wrote about this in the Huffington Post  yesterday; the equivalent  federal minimum wage was 13% higher in 1963 and 23% higher in 1968 than today.

There are more than a few states that have a minimum wage that is higher than the federal rate. Washington’s is $9.19/hour, the highest in the country and .82 higher than the 1963 inflation adjusted wage of $8.37/hour.

Be sure to check the map for the 4 states that have lower minimum wages than the federal. American Samoa has its own rules, and most of their wages  are lower than $6/hour. The wonkier of my readers might be interested in this  link to a large study published in 2013 that debunks the idea that an modest increase in the minimum wage has a material negative effect on small businesses).

While many of my readers are not earning minimum wage, these calculations inform us all. As Martin Luther King Jr. once said, “while we may have all come from different ships, we are all in the same boat now.”

Note: Federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. In those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.”

Washington DC

Washington DC (Photo credit: Kathleen Tyler Conklin)

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Payroll Tax Holiday to end in 2013

I read that line about the “payroll tax holiday” last year  in my hometown newspaper. Holidays have to end, after all.

Why do people like to complain about Social Security and the payroll tax?  Some of them are free-market purists, Libertarians, lobbyists, and others who believe that everyone in America can succeed without any government support whatsoever. If you believe that all taxes are ‘confiscatory”, please read no further.

However, I haven’t met any people over 65 yet in the last 25 years who are not claiming their Social Security benefits. Well, there is that one family member who believes that people make rational decisions, all the time. But I digress.

The sub-headline could also have read:

Americans to resume full contributions to Social Security accounts in 2013.

Most of the people I speak to professionally are very appreciative of a lifetime annuity plan, with a cost of living increase, where they don’t have the worry of investment management. (Yes, Virginia, Social Security is that). For many older baby boomers, it will be the only plan like that they ever have.  Continue reading

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Bright Shiny Objects #2 Holiday Traditions or Shoulds?

What are your favorite holiday traditions? Do you go berserk each year trying to decorate or do you gather the family and enjoy a leisurely afternoon installing the decorations of the season? Wherever you land on this continuum, it might be time to check on the “we always do it this way” types of activities. Shoulds are not allowed in Santa’s pack!

Box of glass Christmas ornaments

Box of glass Christmas ornaments (Photo credit: Wikipedia)

From a financial perspective, these traditions are expensive, especially if it turns out nobody is that interested.  One way to tell if a change is needed is if you are the only one getting it all done. When measuring the cost, don’t forget to consider time, talent and treasure (money).

Travel: Do you travel for the holidays? Have you tried some alternative techniques, from taking the train instead of driving to offering to book a nice B and B (or Airbnb) for the visiting family members?

The Tree(s):  How many? Fake or real? Lie down for a nice nap and decorate the rosemary bush instead? Holidaze….

English: Shiny haws in Bulley Lane That remind...

English: Shiny haws in Bulley Lane That reminds me – must start the Christmas shopping. (Photo credit: Wikipedia)

Entertaining: Whether you prefer a bountiful dinner party, an  ‘Open House’ or gathering the clan together after a school concert, make a plan and set a budget in advance.

Gifts: many families organize gift giving around experiences, or gifting locally. Some make things at the do-it-yourself ceramic place, cook together, or offer to take someone else’s  kids out for an afternoon of shopping or the movies. Looking for gifts made just down the street ensures more of the funds stay in your community. Another strategy is to give everyone the same thing, from tickets to the local playhouse to down slippers or cloth napkins you made yourself.

Think about why you do certain things in December, and if they still bring you joy.

Will they bring family and friends together?

Could you have a low-key gathering on Boxing Day instead (12-26)?

Attend the live reading/playing of Handel’s  Messiah at church?

Can it involve recycling such as a ‘white elephant’ exchange or Bill Cosby sweaters?

Donate or do something for others in your community-or make time to do something special for a family, non-profit or school AFTER the New Year has begun.

Whatever your decision, and especially if you have a new household, be intentional about your traditions this year. You will enjoy them more and maybe even save a little ‘green’.

Gift Box

Gift Box (Photo credit: Maeflower72)

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Conversations About Money: Vacations

What kind of vacations did you take while growing up? My family did a lot of hiking, backpacking and skiing. I’m not sure that we ever took ‘normal vacations’, but I look back on them fondly. They were full of variety.

We got to hike and backpack when you could drink the water from the trailside streams and rivers. I had my own Sierra Cup that hooked into my belt. (wish I still had it!) My parents brought eggs to hide one Easter weekend up in the Olympic Mountains and there was always coffee for them. (I did not yet imbibe.) One hike along the beach was a disaster because there was grilled steak for dinner and “someone” [not me], failed to pack the steak knives. So we ate it with our fingers. My brother and I were cool with that.

Costs of these weekend outings were generated by: gas, freeze-dried and real food, paper topographic  maps, a battered copy of Trips and Trails by Bob and Ira Spring, the occasional purchase at REI Co-op (my dad had a very low membership number), and maybe a hamburger at the XXX Root Beer Drive-In on the way back. I was a cheap date (plain hamburger-no condiments). My family didn’t drink soda back then.

The Kendall Katwalk Trail along the stretch of...

The Kendall Katwalk Trail along the stretch of the Pacific Crest Trail in the Alpine Lakes Wilderness. (Photo credit: Wikipedia)

We hiked in the real mountains, on the Pacific Crest Trail, in the Alpine Lakes Wilderness, in Mt. Rainier National Park.

While in high school-I did get to a fake mountain-the Matterhorn.

Disneyland

Disneyland (Photo credit: CAHairyBear)

My high school band director entered my name for the McDonald’s All-American HS Band and I was one of the 100 musicians selected.

The band made two trips to march in parades at Disneyland and in New York City! Cost to me: free, save for the missed homework. (Oops, there was the family investment in the private music lessons-but as a teenager, I wasn’t bearing that cost.)

Like many families with children, we began to travel for athletic events. I distinctly recall the trip we took to a swim meet in Santa Clara. I was the spectator and my mother was the competitive athlete, however. (Masters Swimming!) My brother went to her swim meet in Toronto.

While many of my peers travelled to Hawaii while I was in high school,  I didn’t get there until I was over 30! (Cost of that trip: airfare for two, shared meals and entertainment, thank you gift to the owners of the time-shared condo). Loved visiting a coffee plantation on the Big Island.

big island of Hawaii

big island of Hawaii (Photo credit: Wikipedia)

Eventually I went to Europe when I was older. The 3-week trip was  paid up ahead of time due to our DINK status (Dual Income, No Kids).

In summary, we didn’t take extravagant vacations while growing up, we didn’t know what we were missing,  and I have some adult habits that have served me well. (see them below)

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Black Monday: Stock Market History Lesson #2

DJIA (19 July 1987 to 19 January 1988).

DJIA (19 July 1987 to 19 January 1988). (Photo credit: Wikipedia)

The 25th anniversary of Black Monday just passed on October 19. Wow, 1987.  It doesn’t seem like that much time has passed, however, I will note some changes later in the post.

In 1987, I was a stockbroker and had already been a Registered Representative for three years. We didn’t call ourselves “financial advisors” or “wealth managers”. We were salespeople.

In fact, this was so long ago that I worked for the “white-shoe firm”, Dean Witter, then a member of the Sears Financial Network. “Buy your stocks where you buy your socks”, as the saying went. And yes, I did get a great account from a Boeing retiree who came in to buy socks for his grandson, who gave me his address before leaving the store. Then I sent him a letter , we talked, we met, then he wrote Dean Witter a check.

Dean Witter logo under Sears ownership ca. 1984

But I digress,

  • Being the only one with a [self-purchased] PC on my desk at my office (I also had a cell phone then, but that is another story)
  • Answering incoming telephone calls ALL day back to back
  • Placing trades to buy stock-the Nordstrom trades come to mind first – “After all, Dana, you said to buy low, I guess this would be the day”
  • Virtually holding people’s hands over the telephone (a large black instrument with a cord and buttons) so they would be comforted and reassured that the world wasn’t coming to end that day
  • Not revealing how nervous we were to our clients
  • Reading all about it in the newspaper, the rest of the week
  • Watching Louis Rukeyser on Wall Street Week, afterwards
  • How quickly the market bounced back, setting new highs in spring of 2009

It was, indeed, a different world. I am fortunate to have worked for another firm from 1988-1990 that required its’ “investment executives” to study for and obtain the CFP(R) certification. (Certified Financial Planner)

Disclaimer:
I do not sell individual stocks, and am not recommending any securities/companies mentioned in this post. My business is that of a fee-only financial planner. In my case, this means I receive compensation solely from my clients. [I have been known to give to public television and radio, but am not soliciting for those either. ]

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Stock Trading from “Pieces of Eight” to Decimals: History Lesson #1

For those of you who are under a certain age, you might wonder if stocks were always traded in prices with decimals. Stocks were traded in eighths for more than 200 years.  What do I mean? Today, for example,  you can buy a share of Microsoft at $30.29. When it went public in March of 1986, the stock began trading at $21 per share and then would have traded at prices such as $22 and 5/8 or $30 and  1/8 in later days and weeks.
This Day in Financial History, (on my Blogroll) mentioned this anniversary earlier this week and I did a little reading and remembering. In 1997,  the Common Cents Pricing Act passed; which then eliminated the pricing of stock in eighths. This led to pricing changes in the year 2000, on August 28. It used to be a slow day.

[Remember the last week of August used to be a vacation week? Or at least it used to be before so much was done by computers. Computers don’t go to the Hamptons, or the Jersey shore in August.]

From Jason Zweig’s blog-This Day in Financial History: 2000: The New York Stock Exchange begins trading in decimals, ending the two-century-old practice of pricing stocks in increments of 1/8th of a dollar. In theory, investors will benefit from lower trading costs, but cynics worry that brokers will make more money than ever. The first to adopt decimal pricing: Anadarko Petroleum, FedEx, Forest City Enterprises, Gateway, Hughes Supply, and MSC Software.
Source: The Wall Street Journal, August 28, 2000, p. C1; http://www.nyse.com/about/timeline/1047054055416.html

English: The New York Stock Exchange in 1882 b...

English: The New York Stock Exchange in 1882 by American illustrator and scenic artist Hughson Hawley (1850-1936). (Photo credit: Wikipedia)

As I recall, (Yes, Virginia, I was a stockbroker then), when prices changed, first the eighths went from 5/8 to .625, then migrated to all decimals.

Another piece of rich stock market history-gone.  For several centuries, coins [Spanish dollars mostly] were cut into 8 pieces. So to trade stocks in eighths of a dollar wasn’t a big leap. As the our stock market began with the Buttonwood Agreement of 1792, this practice of calculating prices in eighths lasted a very long time in the US stock market.

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